Apple Inc. has had a long history of reinventing itself. The first Apple computers were built in a garage without any type of case, monitor, or keyboard. Despite these modest origins, there was still demand for Apple grew exponentially. It wasn't long before Apple introduced the trademark Macintosh and then the Mac OS X which revolutionized the company. It was also at this time also dedicated much of the company's resources to aesthetics and further developing the Apple brand image through distinctive designs and intuitive features. This dedication to user friendly designs created generations of loyal customers who have fully embraced the Apple brand and champion the Apple products. The digital hub strategy which was responsible for the iPod, iPhone, and iPad completely revolutionized the industry. Make no mistake, Apple's competitive advantage is due to their ability to innovate and reinvent themselves at every corner.
However, with the death of Steve Jobs and information surfacing publicly about some of the challenges faced in the supply chain in regards to social and environmental issues, Apple must again reinvent themselves in order to maintain their position as the top technology company in the world. The new challenges the company faces are mainly a result of the standard of innovation that the company has achieved that has set a high bar in order to sustain that level of performance. There are also challenges that are due to the fact that Apple outsources all of its production functions and has limited control over much of its operating procedures. Therefore, Apple must not only achieve a level of innovation that suits its growth trajectory, but it must also do so in a sustainable and transparent manner that does not further deteriorate its brand image in the new complex and globalized world.
Apple is on a path to sustain and remain as the foremost producer of consumer computers and consumer electronics around the world. The Apple strategy represents a strategy known as the "digital hub" (Mortensen, 2010). This strategy has served for the foundation of their achievement in the last decade. The digital hub strategy envisions the computer as the central component of a much broader system that includes many accessories that help people be creative with their digital information (HP, 2012). Thus the role of the personal computer is to serve as the center or hub of an array of devices that all store digital content and serve different purposes. For example, a camera snaps photos of your life and a MP3 player holds your favorite music however both of these devices are generally reliant on a computer to transfer the digital content. It was from this concept that revolutionary products such as the iPod, iTunes, iPhone, and iPad were all born.
In today's market, Apple faces fierce competition in the consumer electronics segment and various related industries. There are a number of companies who offer similar products, which often are priced at a rate that is much less than Apple products. Furthermore, as soon as Apple releases a new product it is quickly copied by many of the competitors. Market pressure is perpetually being wielded from such power house companies such as IBM, Dell, HP, and Toshiba in the personal computer world (Wildstrom, 2009). In the cellular phone market segment Apple competes with companies like HTC, Palm, Blackberry, and Motorola (Wortham, 2011). Apple has had success competing with these companies even though Apple commands a market premium due to design innovation as well as high quality standards.
Since Apple's market niche is heavily dependent on both quality and innovation, it must constantly act boldly to be the first to market. If they were to ever let down their guard in these areas then it is likely to suspect that they could lose considerable market share. This would devastate the current operating method as well as the whole business model. To expedite the time to market for its products, Apple has outsourced their production operations to strategic partnerships overseas to companies such as Foxconn in China. Foxconn has world class production facilities and skilled labor that are arguably the best in the world. Foxconn can take a design and in some cases in less than a week have a production operation up and going which can mass produce Apple's products. Despite the level of sophistication in manufacturing that Foxconn can produce for Apple, it also has many social costs that have degraded the Apple image in recent years.
There have been cases arising in the media about some of the practices that the suppliers use in manufacturing Apple's products that have generated a good deal of negative publicity. Apple's main suppliers in China that produces such items as the iPad and iPhone has come under criticism for using child labor as well as violating employees' human rights (Moore, 2010). Other negative publicity reports that have surface include Apple's suppliers violating environmental regulations in China which are far less comprehensive than the regulations in the developed world (Meyer, 2011).
Part Two -- Vision, Mission, and SMART Objectives
Apple Inc. will lead the world in producing electronic products that are innovative and produced in the most socially and environmentally way possible.
Apple Inc. will create the innovative electronic products that will revolutionize the way in which we live our lives by making the digital world more convenient, more useful, and more integrated with our daily lives.
The specific goals that Apple must achieve are to be the world's most sustainable and profitable electronics provider. Although Apple has a corporate social responsibility (CSR) message in place, it must do more to protect its image and add value to its products. As a result, Apple must achieve a zero human rights violation position in the very near future. To achieve such a position it will be necessary for Apple to become more integrated with its supply chain so that it can more closely monitor their operations and ensure that their no further ethical violations.
A zero human rights violation policy can serve as a measurable goal. Obviously any documented human rights violation would translate into a failed achievement of this goal. At the present, Foxconn and other Apple suppliers have a great deal of autonomy over their operations. Apple must integrate with these suppliers to perpetually monitor the foreign operations. Currently Apple does monitor its suppliers through audits and inspections however this strategy does not seem to ensure that there are no human rights violations.
It is believed that a zero human rights violation is achievable. It will take a great deal of effort from Apple to realize this goal however. Even though Apple does audits, the dates of such audits are allowed a head of time and the suppliers undoubtedly reorganize their operations to meet the terms of Apple's contractual agreements. Therefore Apple must find better ways to hold its suppliers accountable without overly burdening their ability to manufacture electronic products.
Given the level of negative publicity that Apple's suppliers have generated, a renewed dedication to social and environmental responsibility is entirely relevant to Apples overall strategy. The human rights and environmental violations have severely diminished Apple's brand image among some of its most loyal customers. Therefore to repair this damage Apple will have to go above and beyond compliance measure to win back these consumer segments.
It behooves Apple to achieve their zero human rights and environmental violation policy in an expedient manner. However, at the same time it must balance this policy with the feasibility of achieving this goal. If Apple moves quickly to integrate with their suppliers and sure that there are no further violation then this goal should be attainable within a period of one year. Therefore the schedule of the goal should be set at a one year time period so that Apple can take the necessary steps to hold their suppliers accountable.
Part Three -- Strategy Implementation
Apple must perpetually focus on quality and innovation to maintain its premium market position. However, Apple needs to reorganize its production capabilities in a manner that utilizes ethical treatment of the labor and environmentally responsible practices throughout the entire supply chain. Even though all of Apple's production facilities are outsourced through contractual agreements with strategic foreign partners, it is also reasonable to suspect that given Apple's dominance in regards to bargaining power, it could easily reorganize its contracts with its suppliers so that the company is in a better position to hold their suppliers accountable for its business practices.
Apple should also position employees internally at these production locations to monitor the daily production activities. Although Apple maintains a high level of secrecy about its entire supply chain, it is reasonable to suspect that since Apple has become a focal point for many investigative journalists that it will not be able to keep many secrets…